FTC rules on Native Advertising Labeling: transparency

The U.S. Federal Trade Commission (FTC) updated its guidance on native advertising just before attacking the Christmas diner. With the guidance, the FTC tries to make sure to protect consumers from advertising in disguise. Confused and confusing A study from contently.com stated the obvious: consumers are utterly confused about what is advertising, and what is not. They have difficulties to detect native advertising within ‘real’ editorial content. The key-findings of the study:

• On nearly every publication tested, consumers tend to identify native advertising as an article, not an advertisement.
• Consumers often have a difficult time identifying the brand associated with a piece of native advertising, but it varies greatly, from as low as 63 percent (on The Onion) to as high as 88 percent (on Forbes).
• Consumers who read native ads that they identified as high quality reported a significantly higher level of trust for the sponsoring brand.
• 62 percent of respondents think a news site loses credibility when it publishes native ads. In a separate study conducted a year ago, 59 percent of respondents said the same.
• 48 percent have felt deceived upon realizing a piece of content was sponsored by a brand—a 15 percent decrease from last year’s survey.

While this might look as great and fab to some advertisers and their agencies, it is clear that the FTC is not amused. Their guidance clearly aims to over time enforce a guarantee that native advertising is very clearly labeled as such. Shared responsibility The FTC puts the responsibility of correctly labeling the native advertising as advertising jointly to the advertisers, their agencies, and the publishers that own the content platform, be it on- or offline. It expects not only that the commercial piece is clearly labeled as such, but moreover that the visual presentation of the native advertising piece leaves no doubt for the consumer that it is “different” from the regular content. Ethical behavior FTC put out a guidance in the US that is completely in line with its view on the commercial use of influentials and bloggers: asking for complete transparency and disclosure. The FTC guidelines and policies historically become textbook best practice guides real quickly in Europe. Personally, I think that as well the advertisers, the agencies as the publishers have a moral duty to disclose, and be fully transparent. Duping the consumer into thinking that a piece of content is genuinely editorial is just plain wrong. There is room enough to be creative with native advertising without having to dupe the consumer in any way.